RBI Recognises Finance Industry Development Council (FIDC) as SRO for NBFC Sector

The Reserve Bank of India (RBI) has officially recognised the Finance Industry Development Council (FIDC) as a Self Regulatory Organisation (SRO) for the Non-Banking Financial Companies (NBFCs) sector, marking a key reform in strengthening self-governance and market discipline within the financial ecosystem.

Recognition Under OMNIBUS Framework

The RBI had invited applications in June 2024 under its “OMNIBUS Framework” for recognising SROs across regulated sectors. Three letters of interest were received for the NBFC segment, and after detailed evaluation, FIDC was finalised for recognition.

Role and Responsibilities of FIDC as SRO

As an SRO, FIDC will primarily:

• Promote best business practices among NBFCs to reduce the regulatory compliance burden on RBI.
• Frame a code of conduct for its member NBFCs and ensure adherence.
• Protect the interests of customers, depositors, and other stakeholders in the financial ecosystem.
• Set minimum benchmarks and conventions for professional market conduct within the NBFC community.

Coverage of the SRO

FIDC will represent a broad range of NBFC entities, including:

• NBFC–Investment and Credit Companies (NBFC-ICCs)
• NBFC Factors
• Housing Finance Companies (HFCs)
• Infrastructure Financing NBFCs (NBFC–IFCs)

Voluntary Membership Clause

According to the RBI, membership of the SRO will be voluntary, ensuring that NBFCs can choose whether to become part of the organisation while still benefiting from the collective standards and advocacy of the body.